Friday, April 22, 2016

China insurance regulatory Commission warning to Hong Kong to buy insurance

Insuring risk-prone behind the boom in Hong Kong, the China insurance regulatory Commission on this controversial phenomenon of sound.

On April 22, the CIRC's official website published "tips on insurance risk to Hong Kong residents in the Mainland" article, citing mainland users to its Hong Kong insurance 5 risks that may arise from laws, foreign exchange, return, surrender, specific provisions to make tips.

Following is the full text:

With the improvement of residents ' income and enhanced their sense of insurance, some Mainland residents to visit Hong Kong to purchase insurance products. Insurance business in Hong Kong and the Mainland law, regulatory policy, and insurance products, there are many differences.

China insurance regulatory Commission on the risks associated with buying insurance in Hong Kong prompted the following, hope the broad masses of consumers are aware of the risk, prudent insured.

Legal protection of a Mainland, Hong Kong is not the fact

Firstly, mainland residents ' insurance policies in Hong Kong, went to the insured and Hong Kong sign the insurance contract you want. Territory of insurance policies in Hong Kong are illegal "underground insurance policies", neither the civil law, are not subject to Hong Kong law.

Second, mainland residents insured insurance applicable Hong Kong laws of Hong Kong. Where there is a dispute, the applicant required rights proceedings under the laws of Hong Kong. Compared with the Mainland, higher cost of legal proceedings in Hong Kong, could face higher costs of time and cost.

In addition, other than the legal proceedings, the applicant may also choose to the insurance claims complaints Bureau in Hong Kong complaints and claims-claims disputes, but the Council may award compensation limit is 1 million Hong Kong dollars, large policy disputes could not be processed by the Council decision.

Second, the exchange rate risk and foreign exchange risk policy

On one hand, mainland residents in Hong Kong, the policy, payments, insurance premiums paid in Hong Kong dollars, US dollars and other foreign currencies, consumers need to take foreign currency exchange rate risk. Increased camp changed rules introduction purchased

The other hand, outside of mainland residents to buy life insurance and investments return dividends insurance, financial and capital transactions, is a project of the current foreign exchange management policy has not yet been opened, there is a certain risk. In addition, premium payment methods to purchase term life insurance policies, there may be due to changes in foreign exchange policy cannot pay the renewal premium risk.

Three uncertainties, policy benefits

For a participating insurance, its dividend above the guaranteed return is uncertain. Mainland insurance products in compliance with regulatory requirements, in accordance with the level of low, medium, and high profile shows bonus, shows interest rate caps, and 3% and 6%, respectively.

Higher degree of Hong Kong's insurance market, the dividend is not shows a clear demand and most commonly used 6% of dividends more than rate of return shows. But the bonuses themselves are not guaranteed, with great uncertainty, can be realized depends primarily on whether insurance companies maintain a high return on investment for a long time.

Four early, policy cash value low, return loss

When a surrender in the Middle, the insured person can only get the cash value of the policy. Hong Kong regulators on the cash value of the insurance products without specific requirements, most Exchange early in the policy cash values of the policy for a long time is very low, 2 years before or even zero customers once they surrender will suffer larger losses.

Five, needs to be carefully read the terms of insurance products

Terms of insurance products in Hong Kong uses traditional Chinese characters, expressions and the Mainland vary. Applicant needs to be carefully read the articles, fully understand the conditions of insurance liabilities, claims, and other important content to avoid contract disputes caused by inaccurate articles understanding.

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